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TRANSCRIPT
8 June 2016
Investor dayEmporium Melbourne, VIC
Welcomeand overviewAngus McNaughton
Chadstone, VIC
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Investor dayAgenda
MORNING Welcome and overviewAngus McNaughton CEO and Managing Director
Page 2
AFTERNOON Development overviewMichael O’Brien Chief Investment Officer and Acting EGM Development
Page 43
Brand and digitalSimone Carroll EGM Digital, Marketing, People & Culture
Page 9
Mandurah ForumJames Fudge Project Director
Page 48
LeasingStuart Macrae EGM Leasing
Page 22
The GlenBarnaby Giudice Project Director
Page 62
Intensive asset managementJustin Mills EGM Shopping Centres
Page 28
RoselandsJon Savell Director – Development
Page 80
Outlet CentresMichael O’Brien Chief Investment Officer and Acting EGM Development
Page 36
Asset tour – ChadstoneMark Kelley Project Director
Stuart Macrae EGM Leasing
Asset tour – DFO South WharfJustin Blumfield RGM Shopping Centres (DFOs, TAS, SA, ACT)
Michael Quinn Area Centre Manager, DFO SouthWharf
Wrap upAngus McNaughton CEO and Managing Director
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Enriching community experiencesPurpose
Strategic focus Create value and sustainable growth by owning, managing and developing quality Australian assets across the retail spectrum
Enablers
Vision Delivering the leading retail property and lifestyle experience in Australia
Valuedrivers Investment Development Intensive asset management
Capital andStrategic Partnerships Operational excellence People DigitalSt
rategicplatform
Strategic focus is clearCreate value and sustainable growth by owning, managing and developing quality Australian assets across the retail spectrum
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Organisational chartStructured to support strategy execution
CEO and Managing DirectorAngus McNaughton
EGMLeasing
EGMDigital, Marketing,People & Culture
Chief InvestmentOfficer and ActingEGM Development
Chief FinancialOfficer
EGMBusiness
Development
EGMShopping CentresGeneral Counsel
Stuart MacraeMichael O’BrienRichard Jamieson David Marcun Justin MillsCarolyn Reynolds Simone Carroll
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Group investment principlesFocused on long term value creation and delivering sustainable earnings growth through the cycle
Simple and transparent business modelwith a single sector focus
Invest in quality Australian assets across theretail spectrum
Focus on long term value creationand sustainable earnings growth
Maintain strong balance sheetand access to diverse capital sources
Efficient cost structure
Group level Target
Total return1 >9.0% p.a.
Underlying earnings growth >3.0% p.a.
Portfolio level Target
Property level returns >8.5% p.a.
Development returns Initial yield 6% to 8+%Incremental IRR 10% to 15+%
Key financial objectives (‘through cycle’ basis)
1. Calculated as: (Change in NTA during period + distributions)/NTA at start of period.
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Executing on strategyA strong and active start in the first 12 months
JuneMerger completed
FebruaryMerger refinancingcomplete
AprilInaugural EMTNlaunched with£350m issuance
MayExecuted $926mof divestments andextended divestmentprogram to ~$1.5bDecember
Reiterated strategy,announced ~$750m $1bdivestment program
NovemberRebrand
March$120m ofdevelopmentscompleted1
November$320m of Perthacquisitions
April$350m MandurahForum developmentcommenced
MayDFO PerthJV agreement
2015 2016
FebruaryStrong FY16interim result and18 months aheadon operational costsynergies
MayDFO Brisbanebusinessacquired
1. Vicinity’s share is $63m.
Vicinity Centres | Investor day | 8 June 2016
Asset divestment program
Divestment program of ~$750m to $1b announced in December 2015
Five asset sales agreed in May 2016 for $926m
Divestment program extended to $1.5b in May 2016
Developments
Five projects (~$320m) completed in FY161
Entered JV agreements to develop a DFO2 at Perth Airport for ~$145m
Pipeline increased to $3.8b (Vicinity share: $1.8b)
Acquisitions
Acquired two Perth shopping centres with attractive fundamentals
Acquired3 DFO Brisbane business for ~$55m
Investment in capability
Resources added to Leasing, Development and Digital teamsto drive growth
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Delivering on our portfolio enhancement strategyStrong progress made on our asset divestment program and reinvestment into value enhancing opportunities
1. 100% interest and includes Warriewood Square, NSW which will be completed in June 2016. Vicinity‘s share is $162m.2. 100% interest. Vicinity‘s share is 50%.3. Excluding transaction costs and other costs associated with the transaction. The Shops at Ellenbrook, WA
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Brandand digitalSimone Carroll
Chatswood Chase Sydney, NSW
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The role of the shopping centre in societyThe gathering place
AGORA“GATHERING PLACE”
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The role of the shopping centre in societyInvention of the shopping centre
“PROVIDE THE NEEDED PLACE ANDOPPORTUNITY FOR PARTICIPATION INMODERN COMMUNITY LIFE”
VICTOR GRUEN, INVENTOR OF THE SHOPPINGMALL
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Key trendsCustomer centricity
CUSTOMER CENTRICITY
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Key trendsTechnology enhanced experiences
TECHNOLOGY ENHANCEDEXPERIENCES
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Key trendsRapid validation and speed to market
RAPID VALIDATION ANDSPEED TO MARKET
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Key trendsIntegrating digital into the fabric of organisations
INTEGRATING DIGITAL INTO THEFABRIC OF ORGANISATIONS
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Key trendsExperimenting across multiple horizons
EXPERIMENTING ACROSSMULTIPLE HORIZONS
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Vision for brand and digitalDelivering ‘Better, Easier, More Enjoyable’ experiences
VicinityOur people,destinations,products
and services
Consumer (B2C)People who visitand experience
Customer(B2B)
Our retailpartners
The Vicinity brand
“Better, Easier,More Enjoyable”
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Enriching community experiencesPurpose
Enablers
Brand vision To be known for ‘Better, Easier, More Enjoyable’ experiences
Strategicpillars
MasterbrandDevelop
Strategicp
latform
Leadershipbrands
Protect and grow
AspirationalbrandsTest and learn,
product development
HeartlandbrandsOptimise
Vicinity’s brand architectureA tailored approach
People Digital assets Physical assets
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Enriching community experiences via a fully integrated digital and property platformPurpose
Enablers
Digital vision To be Australia'smost frequented andmost loved retail destinationsthrough seamlessly combined physical and digital consumer experiences
Strategicpillars
ConnectivityConnecting our communities
OnlineLeading online digital assets that arealigned with our physical assets
Omni/phygitalConvergence of digital and physical
solutions to address community needs
Strategicplatform
Vicinity’s consumer led digital strategyEnriching community experiences via a fully integrated digital and property platform
People Digital culture Technology
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Digital road mapDelivery across multiple horizons
ConnectivityConnecting our communities
OnlineLeading online digital assets thatare aligned with our physical assets
Omni/phygitalConvergence of digital and physicalsolutions to address community needs
2016 2018 2020
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Brand and digitalEnriching community experiences
Clear brand strategy1.
Digital pathway set2.
Team committed to executional excellence3.
Leasing
Stuart Macrae
Emporium Melbourne, VIC
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95 assets under management across the retail spectrumand diversified geographically
High tenant commonality across centre types
Critical mass of premium assets in the portfolioattracts luxury and international retailers
Deep national retailer relationships
Largest landlord to Wesfarmers and Woolworths
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A large portfolio with broad potentialStrong tenant relationships underpinned by a portfolio with scale and relevance
9,500+leases
~3,700tenants
~1,500leasing deals per annum1
#1 centre (Chadstone)for total sales in Australia for 14 years
70leasing executives
40retail design and delivery executives
Note: Data as at 31 December 2015.1. Excluding development leasing.
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Simple, consistent leasing parameter expectations designedto maximise income
Five year strategic leasing plan for each asset, updated annually
Long term approach focused on customer wants and needs
Dedicated leasing executives for the top 20 retailers
Dedicated retail design and delivery team to ensure fit outquality and optimal turn around on any vacating tenants
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A clear approach to leasing with a product focusFocusing on retail mix and customer demand drives long term income growth
Halls Head Central, WA
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Consistent specialty store leasing parameter expectations deliver stronger resultsSetting clear parameter expectations enables a transparent discussion with retailers and narrows the leasing negotiation
Specialty store leasing parameter Rationale5 to 6 year terms Provides balance of stability and flexibility for both owner and retailer
5% annual increase Underpins strong growth over the lease termMaximises income even though leasing spreads on renewal may be negativeProvides rental certainty to both owner and retailer
Promotional fund Maximises marketing spend to drive foot traffic and, in turn, sales and rents
Full fit outs on expiry Ensures individual store fit outs remain relevant and consistent with the centre look and feelAssists in maintaining consistent presentation standard across tenancies
No incentives or rent free on renewals Clear position with retailers
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Strategic leasing plans identify key focus areas• customer requirements• stronger performing retailers• product opportunities• tenant renewal/replacement strategy• rent and capital requirements
Five year leasing plans, updated annually
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Strategic leasing plans in place for every centreUnique centre specific plans deliver a tailored community experience
Strategicleasing plan
Centre team
Centre operational planSite works,
tenancy deliveryand retaileron boarding
Development
Vision and master planningDevelopment, refurbishment,and reconfigurationrequirements
Customer and retailer insightsDemographics and customer researchRetailer performance and strategy
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Opportunities in a changing retail landscapeAnticipating retail trends enables a timely and proactive response
Increasing demand for international and luxury retailers
Health and wellbeing a growing focus
Increasing desire for high quality cafes and restaurants
Popularity of outlet centres growing as customersseek value
Majors rethinking their customer strategies to regainshare of customer spend
Physical presence the foundation of omni channelretailing
Incentives
Pharmacies continue to be impacted by regulatorychanges
Rationalisation of bank and Medicare branches
ATMs being used less due to payment technology
Health and wellbeing Quality food and dining out
International and luxury retailers
Intensive assetmanagement
Justin Mills
QueensPlaza, QLD
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#1in Sub Regional and Outlet centres
#2in Regional centres
95retail assets under management
3.0 million sqmof GLA under management
$18.5 billionin annual retail sales
700+shopping centre management team
Significant ancillary income opportunities
Operational management and procurement benefits
Asset refurbishment team projects enhance asset qualityand customer experience
Knowledge sharing across a broad number of shoppingcentre teams
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Shopping centre management platformVicinity’s scale and intensive asset management approach provides significant benefits
Note: Data as at 31 December 2015.
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Structured for performance and growthHybrid structure underpins intensive asset management approach with focus on income, cost and regional success
EGM = Executive General Manager; GM = General Manager; RGM = Regional General Manager.
RGMShopping CentresDFO, SA, TAS, ACT
National ManagerGeneral Services
GMMall Space
GMOperations
RGMShopping Centres
WA
RGMShopping Centres
QLD
RGMShopping Centres
NSW
RGMShopping Centres
VIC
GMChadstone
Regional teams
National teams
EGM Shopping CentresJustin Mills
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Effective management of a diverse portfolio
Focused teams and knowledge sharing
Better resource utilisation
Similar trends experienced in nearby assets
Structures aligned to brand architecture
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Custom manage our centres to optimise performanceApplication of intensive asset management to every asset in a cost effective way
Chadstone, VIC Galleria, WA
Mornington Central, VICCarlingford Court, NSW
Bespoke structure Premium structure
Mid structure Hub and spoke structure
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Optimise new and organic income opportunities
Deliver customer and retailer value through increased operational efficiency
Deliver exceptional customer and retailer experiences that drive sales
World class people and best practice processes
Best practice operational risk and compliance
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People and processes
Adding value through intensive asset management approachPRICE model is used to guide Vicinity’s intensive asset management approach
Risk management
Income
Cost
Experience
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Key category Opportunity
Casual mallleasing
• Significant scope to increase occupancy rateand drive income
Electricityon sell
• Currently in 57 Direct Portfolio assets• Opportunity to implement in additional 20 assets
Retail media
• Seven existing digital screens across Direct Portfolio
• Additional 10 to 15 large format digital screensexpected in next two years, supported bysupplementary screens to deliver superior nationaldigital screen network
Storage • Opportunities to maximise income through newstorage sites and achievement of market rates
Income opportunitiesOpportunity to grow ancillary income streams across the portfolio
The Myer Centre Brisbane, QLD
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Direct portfolio1 controllable expenses ~$145m Financial benefits• Targeting 5 10% savings in controllable expenses by FY18
Non financial benefits• Enhanced process and risk management• Improved standards and reporting• Greater efficiencies• Stronger supplier relationships
Opportunities• Cleaning• Electricity• Waste• Equipment• Design• Capital expenditure
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Procurement opportunitiesGreater scale, rationalising contracts and innovation generating cost savings and more sustainable outcomes
Proportionof controllable
expenses(%)
Number of suppliersNow At merger
Cleaning 33 8 19
Electricity 19 24 24
Repairs/maintenance 18 WIP 1,191
Security 14 2 2
Waste 5 2 13
Mechanical services 2 1 25
Others 9 WIP 46
Total 100
1. Direct portfolio budgeted FY16 spend.
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Small capital investments with strong returns
Improving asset quality and relevance
Providing better customer and retailer experience
Projects focus on improvements that drive foot traffic,sales and leasability
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Improving centre experienceAsset refurbishment team (ART) projects enhance asset quality and customer experience
Box Hill Central, VIC
Mornington Central, VIC
Outlet Centres
Michael O’Brien
DFO Homebush, NSW
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Outlet Centres overviewOutlets are an attractive investment proposition and Vicinity’s strategy is to reinforce its leadership position in this sector
+10.1% p.a.increase in foot traffic
+6.5% p.a.increase1 in specialty MAT/sqm
+6.8% p.a.increase2 in specialty store rent/sqm
+250 bpsincrease3 in specialty occupancy cost
+$209 millionincrease4 in value
14.5%internal rate of return5
1. Figures include development impacted centres.2. Excludes marketing and promotional contribution. Excludes Homemaker retailers.3. At acquisition figure excludes DFO South Wharf which had been trading for less than 12 months. December 2015 figure excludes DFO Homebush which was development impacted.4. Valuation less capital expenditure and acquisition cost.5. Including capitalised interest and acquisition costs.6. Includes DFO Perth Airport development and DFO Brisbane business.
Performance of four DFO assets since acquisition in 2010 to 31 December 2015 Leader in Australian Outlet Centres
$1.1b under management across six assets6
Outlets have desirable characteristicsHigh barriers to entryStrong demand from high quality tenantsPerformance through the cycledue to strong value proposition
Vicinity has a proven ability to add value
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DFO Homebush case study
Acquired in 2010
$100m major redevelopment completed in March 2014
~$115m of value created since acquisition1
Vicinity has a unique skill baseBreadth of tenant relationships used to enhance mix
Ability to drive ancillary income and cost savings
Further scope to improve experiential elements e.g. dining
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An attractive investment propositionActive leasing, management and development of DFO portfolio has generated significant value
Performance metrics At acquisition Current
Valuation ($m) 2,3 135.5(purchase price)
365.8
Capitalisation rate (%) 4 7.75 6.00
Specialty sales ($/sqm) 4,5 11,400 14,148
Specialty occupancy cost (%) 4,5 7.4 8.8
Occupancy rate (%) 4 99.4 100.0
Ancillary income ($m) 0.0 3.0
IRR since acquisition (%) 6 15.8
1. Valuation less capital expenditure and acquisition cost.2. At acquisition excludes acquisition costs.3. Current includes the impact of $100m redevelopment completed in March 2014.4. Outlet Centre only.5. At acquisition is for the year ended 30 June 2010.6. As at December 2015. Includes acquisition costs.
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DFO Perth Airport$145m greenfield development1 at Perth Airport50:50 joint venture, Vicinity will be property and development manager31 year ground lease, with 49 year optionCentrally located on major arterial roadsOver 110 stores across 24,000 sqm of GLA and over 1,600 car spacesForecast initial yield of >8% and IRR of >13%
DFO Brisbane business
$55m purchase price2, forecast initial yield of ~7.5% and IRR of ~9.5%~150 stores across 26,100 sqm of GLA and over 2,600 car spacesRetail expenditure growth of 4.1% p.a. in the trade area (10 year forecast)3
Located at Brisbane Airport, within 30 minutes drive of 1.3m residents• 22m travellers through the airport annually4
Built in 2005 and expanded in 2015
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Value adding recent acquisitionsFurther solidifying Vicinity’s market leading position in Outlet Centres
Artist’s impression
1. Vicinity’s share is $72.5m.2. Excluding transaction costs and other costs associated with the acquisition.3. Trade area refers to Main Trade Area. Forecast by MacroPlanDimasi.4. Source: Brisbane Airport Corporation Pty Ltd. Based on Brisbane Airport visitor numbers in FY15.
Vicinity Centres | Investor day | 8 June 2016
Asset comprises an outlet centre, homemaker centre,food and beverage precinct and car parking
Acquired 50% interest in 2010 and further 25% interest in 2014
IRR since acquisition of 13.9%
International premium and sporting retail focus
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DFO South WharfPart of a world class and evolving mixed use precinct
Key metrics1
Vicinity ownership (%) 75
Valuation (Vicinity share) ($m) 325.0
Capitalisation rate (%) 6.50
Total GLA (sqm) 56,470
Total stores 214
Specialty sales ($/sqm) 8,811
Specialty occupancy cost (%) 10.5
1. All metrics are as at 31 December 2015, except GLA and store number which are as at 31 May 2016.
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DFO South Wharf$14m development1 completed with mini major reconfiguration and food court upgrade
Floor plan – basement levelJune 2011
Current floor plan – basement levelMarch 2016
ANACONDARIVERS
Anacondareconfigured March
2016
ReconfiguredApril 2013
COTTONON
MEGA
GLUE
BONDSOUTLET PODIUM
SPORTSCALVINKLEIN
RIVERS
Former Anaconda tenancy has been reconfigured into a loop mall incorporating an additional 22 specialty stores
Project also included a food court upgrade
Opened in March 2016
Forecast initial yield of >18% and IRR of >25%, ahead of initial projections
1. 100% interest. Vicinity’s share is 75%.
LegendMini majorSpecialty store
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Construction of a 1,113 space multi deck car park nowunderway in conjunction with the State Governmentof Victoria and Plenary Group’s expansion of theMelbourne Convention and Exhibition Centre (MCEC)and new 300 room hotel
MCEC expansion and enlarged car park will driveincreased car park income, improved accessto the centre and greater foot traffic
Car park ground lease has been extended to 2108,in line with the retail component
Project cost of $61m (Vicinity share: $46m)
Strong returns over time driven by additional car parkincome and longer lease duration
Completion expected early 2017
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DFO South WharfPrecinct expansion and new larger car park
Outline of existing on grade car park
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Developmentoverview
Michael O’Brien
Halls Head Central, WA
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Retail landscape changing dramatically
Our portfolio provides significant development opportunities
Retailers who can adapt are most profitable and are expanding
Broadening range of anchor tenant options
Asset owners and managers with expertise have advantage
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Enhancing the quality of the portfolioOur portfolio and the changing retail landscape creates significant development opportunities
Development overview
$3.8 billionexpanded development pipeline1
12 projectsidentified pipeline
$1.3 billionprojects under construction2
30development executives
1. Vicinity‘s share is $1.8b.2. Vicinity‘s share is $600m. Chadstone, VIC
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Land availability
Authorities’ support
Majors’ interest
Specialty retailer demand
Viable plan
Expected financial returns meet hurdles
Risk is acceptable given expected returns
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Prioritising projectsA comprehensive set of criteria used to prioritise developments and allocate resources effectively
Development returns Target
Initial yield 6% to 8+%
Incremental IRR 10% to 15+%
Development overview
Cranbourne Park, VIC
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Rigorous controls govern the development planning processA structured process and consistent approach ensures efficient and successful project delivery
Ongoing 6 – 24+ months 6 – 15 months 6 – 36 monthsMaster planningLocal authority supportAnchor tenant demandMarket researchLand availability
Concept developmentStructure planningPreliminary feasibility
Feasibility analysisFinalise retail planDevelopment ApprovalprocessAgree terms with anchorsProject costing
Finalise designConstruction tendersSatisfaction of all conditionsprecedent
Development control groupestablished to oversee• Safety, time, cost
and quality• Leasing• Construction
Scope opportunity Concept planning Project validation Mobilisation Delivery
Board and senior management oversight and progressive approvals throughout process
Iterative processVicinity Board/
Co owner approval
Development overview
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Current
Estimated FY17commencements
Estimated FY18+commencements
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TotalVicinity share Partner share$m
150400
4073
325
225
46175
44333
300800
80145
650100
450
61350
7987
666
The Myer Centre Brisbane
Galleria
Chadstone Hotel
DFO Perth Airport
Roselands
Midland Gate
The Glen
DFO South Wharf
Mandurah Forum
Gateway Plaza
Warriewood Square
Chadstone Retail and Office
Expanded development pipeline totalling $3.8b1Development pipeline provides significant opportunity for value creation
Development overview
2
Future pipeline and scope of identified projects are indicative only and will change as projects advance
1. Vicinity’s share is $1.8b.2. Note, an in principle agreement to sell a 25% interest to ISPT has been reached. Should this transaction be implemented, Vicinity’s share of the development spend would be $75m.
James FudgeMandurah Forum
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1. Specialty sales per sqm, compared to Urbis comparable centre average.2. As at 31 December 2015.3. Expressed on 100% basis. Vicinity’s interest is 50%.
Dominant ~40,000 sqm Regional centre in a captive marketbeing expanded to 64,500 sqmMajor Regional centre
Located in one of the fastest growing catchments in Australia
Existing centre trades strongly, 36% above comparable centres1
Leakage due to limited retail offer and out dated presentation
Redevelopment to capture growth opportunity and leakagethrough improved retail offer
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The opportunityTransformMandurah Forum into one of WA’s leading Major Regional shopping centres
Property metrics 2
Valuation ($m)3 312.5
Capitalisation rate (%) 6.25
Discount rate (%) 8.50
Date acquired 1985
Last redevelopment 1995
Perth72kmNorth
Mandurah Forum
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New 4,000 sqm David Jones, new 5,700 sqm Targetand refurbished Kmart
Expanded Coles supermarket
Five new mini major retailers
Over 180 new specialty stores and kiosks (over 80 incremental)
New food court, fresh food and casual dining precincts
Complete refurbishment of existing centre
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Development planMajor redevelopment with significantly improved product offer
Project metrics
Status Delivery phaseForecast cost1 $350mForecast completion 2018Target returns Yield >6%
IRR >10%
On completion Change
Total centre GLA (sqm) 64,500 +26,200Majors GLA (sqm) 30,300 +10,500
Specialties and mini majorsGLA (sqm)number
34,000>220
+15,700>80
Car spaces 3,000 +700
1. 100% interest. Vicinity’s share is 50%.
Mandurah Forum
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The marketLeading market position in trade area with strong population and retail spending growth
Leading market position19.1% market share of trade area1
Strong population growth~95,800 people in trade area,forecast to grow at 2.8% p.a. through to 2028
Excellent transport infrastructureServiced by Kwinana freeway and suburban railline from Perth
Sizeable tourist marketOver 1.4m visitor nights and 1.9m day trippersannually
Strong trade area retail spending growthForecast to grow at ~6% p.a. through to 2028
Source: Urbis Scheme Assessment December 2014.1. Trade area for Mandurah Forum refers to Main Trade Area.
Mandurah Forum
Vicinity Centres | Investor day | 8 June 2016
Dominant segments in the trade area are seekinga relaxed coastal lifestyleYoung suburban familiesRetired professional couples (empty nesters)Recent migrant families
A large tourist market
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Our customersCapture broad audience and growth opportunity by positioning Mandurah Forum as the ‘Everyday Getaway’
Source: Inivio Landscape Segmentation Data, March 2015.
Mandurah Forum
Project vision – ‘Everyday Getaway’A laid back oasis offering everyday occasions to shop,savour and connect
Project pillarsStress free convenienceInside/outside – outside/insideMandurah’s heartEngaging excursion
Look and feelComfortable, relaxing and funIndoor, outdoor landscape integration and water elementsRefreshingly vibrantNatural tones and materials drawn from the region
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Pre development floor plan – groundExisting centre plan has poor customer amenity and access
Mandurah Forum
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Pre and post development floor plan – ground80% of existing centre specialty store area to be demolished
UnchangedDemolishedNew
Mandurah Forum
Note: Proposed plans are indicative only and subject to change.
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Post development floor plan – groundDesirable ‘race track’ configuration with convenient access and customer amenity throughout
Mandurah Forum
Note: Plans are indicative only and subject to change.
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Post development precinct plan – groundA premium shopping destination offering a vibrant retail experience to a diverse and thriving community
Mandurah Forum
Note: Plans are indicative only and subject to change.
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Post development floor plan – level 1 and mezzanineNew parking area with 3,000 car spaces
Level 1
Mandurah Forum
Mezzanine
Note: Plans are indicative only and subject to change.
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David Jones fashion mallArtist’s impression
Mandurah Forum
Ground floor
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Central hub ‘heart’ and event spaceArtist’s impression
Mandurah Forum
Ground floor
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Food court al fresco areaArtist’s impression
Mandurah Forum
Ground floor
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Al fresco casual dining precinctArtist’s impression
Mandurah Forum
Ground floor
Barnaby GiudiceThe Glen
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Expansion of ~60,000 sqmMajor Regional centre to 77,600 sqm
Located in a highly desirable catchment affluent customer base,with above average non food retail spend
Low market share and sales productivity due to offer losing relevance
Opportunity to recapture market share by creating a uniqueand compelling product• Tailoring and improving retail offer• Building on the current strengths of convenience and food• Capitalising on the opportunity to bring in international retailers
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The opportunityAsset repositioning to capitalise on high income trade area and capture escaped expenditure
The Glen
Property metrics 1
Valuation ($m)2 340.0
Capitalisation rate (%) 6.50
Discount rate (%) 8.25
Date acquired 1994
Last major redevelopment 19961. As at 31 December 2015.2. Expressed on 100% basis. Vicinity’s interest is 50%.
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Latest format 8,000 sqm David Jones
Relocated Woolworths and new Aldi to anchor fresh foodmarket with Coles
New international retailers
New contemporary food court with elevated views
New casual dining hub over two levels
Complete refurbishment of existing centre
Three residential towers above the centre with 500 apartments
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Development planMajor redevelopment with significantly improved product offer to reposition centre and recapture escaped expenditure
Project metrics
Status Mobilisation phase
Forecast cost1 $450m
Forecast timing 2017 2019
On completion Change
Total centre GLA (sqm) 77,600 +18,900
Majors GLA (sqm) 24,300 5,100
Specialties and mini majorsGLA (sqm)number
48,400~240
+24,000+~70
Car spaces 3,600 +500
The Glen
1. 100% interest. Vicinity’s share is 50%.
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The marketWell located with an affluent customer base
The Glen
Above average household incomes$88,294 for trade area1, above the Melbourne average
Increasing wealth with low levels of debt31% of ~217,000 trade area residents have a mortgage,Melbourne average is 38%
Premium brand and fashion focusApparel spending per capita of trade areais 7% above Urbis average for Other Regional Centres2
Strong Asian presence with desire for fresh foodand Asian dining offers26% of trade area residents are Asian born
Highly visible with excellent transport links87,000 cars pass The Glen every day
Source: Urbis Scheme Assessment February 2016.1. Trade area for The Glen refers to Main Trade Area.2. Other Regional Centres excludes the top 10 regional centres in Australia including Chadstone Shopping Centre.
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Our customersRe engage our smart, sophisticated clientele by positioning as a more intimate, uniquely local, ‘boutique’ experience
The Glen
Project vision – ‘Mall tique’Uniquely designed to deliver a more personal, family friendlyand authentically local experience
Project pillarsFashionable collectionTransforming everydayCulinary quarterA heart for the community
Look and feelCasual sophisticationOriginality and self discoveryEnvironments that tell a storyA vibrant, comfortable zone
Trade area has many common characteristicsOlder, affluent and well established families
Educated, informed and community mindedEnjoying a high quality lifestyleMulticultural
Strong representation of ‘success stories’ segments~30% suburban professionals~15% successful executives~6% stylish traditional families
Source: Inivio Landscape Segmentation Data, March 2015.
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Planning approval for 500 apartments
Three towers above the retail at the southern endof the centre
Development to be undertaken by major residentialdeveloper – Vicinity receives value for air rights
Location and design of towers does not impedelong term centre master plan
500 residential car spaces in lowest basementwith separate access
Podium slab with services void to segregateresidential services from retail
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ResidentialCentre to benefit from residential development without materially adding risk
The Glen
Artist’s impression
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Pre development floor plan – lower groundAnchored by lower level of David Jones and isolated Coles supermarket
The Glen
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Post development floor plan – lower groundFresh food precinct including three supermarkets
The Glen
Note: Plans are indicative only and subject to change.
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Note: Plans are indicative only and subject to change.
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Post development precinct plan – lower groundFresh food precinct including three supermarkets
The Glen
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Pre development floor plan – groundMall anchored by Woolworths to the south and upper level David Jones to the north
The Glen
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Post development floor plan – groundDesirable racetrack configuration
The Glen
Note: Plans are indicative only and subject to change.
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Post development precinct plan – groundDavid Jones, Target, fashion and international tenants and dining area
The Glen
Note: Plans are indicative only and subject to change.
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Pre development floor plan – level 1Commercial office accessible via lift from mall, with no retail or car parks
The Glen
Commercialoffice
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Post development floor plan – level 1Upper level of David Jones and al fresco dining precinct
The Glen
Note: Plans are indicative only and subject to change.
Commercialoffice
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Town square, café and restaurant precinctArtist’s impression
The Glen
Ground floor
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Stylish new modern feelArtist’s impression
The Glen
Ground floor
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Restaurant precinct with extended trading hoursArtist’s impression
The Glen
Level 1
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Latest format two level David JonesArtist’s impression
The Glen
Ground floor
Jon SavellRoselands
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Expansion of ~62,000 sqmMajor Regional centre to 95,000 sqm
Located centrally with favourable demographics• One of Australia’s most densely populated regions• One of the largest trade areas for Other Regional Centres1 in Australia• Above average retail spending growth
Low market share due to limited historical investment and out datedretail offer
Significant potential to increase market share by re establishingthe relevance of the centre to the community
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The opportunityRe establish Roselands as a true Major Regional shopping centre destination
Roselands
Property metrics2
Valuation ($m)3 370.0
Capitalisation rate (%) 6.50
Discount rate (%) 8.50
Date acquired 2003
Last redevelopment 20001. Other Regional Centres excludes the top 10 regional centres in Australia including Chadstone Shopping Centre.2. As at 31 December 2015.3. Expressed on 100% basis. Vicinity’s interest is 50%.
Vicinity Centres | Investor day | 8 June 2016
New fresh food market with expanded supermarket offer
New fashion precinct anchored by a department store,international mini majors and leading national brands
Refreshed discount department store offer withnew 6,600 sqm Kmart and relocated Target
New cinema and entertainment precinct will complementthe introduction of a leisure and dining experience
New contemporary retail design throughout
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Development planMajor redevelopment with significantly improved product offer
Project metrics
Status Project validation phase
Forecast cost1 $650m
Forecast timing 2017 – 2019
On completion Change
Total centre GLA (sqm) 95,000 +34,500
Majors GLA (sqm) 43,200 +4,400
Specialties and mini majorsGLA (sqm)number
51,800~280
+30,100+~115
Car spaces 3,600 +400
Roselands
1. 100% interest. Vicinity’s share is 50%.
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The marketEasily accessible centre in diverse trade area with pockets of affluence and residents who tend to be spenders
Roselands
One of Australia’s most densely populated regionsTrade area1 population of ~472,000,19% larger than Urbis average for Other Regional Centres
Above average trade area retail spending growthRetail spend forecast to grow at 3.5% p.a. for thenext 10 years
A central, easily accessible location, with a captive marketSouth western suburbs of Sydney with good road access
More home owners with less mortgage debtHome ownership rate in trade area higher thanSydney average
An image conscious customer base which enjoys spendingAspirational shoppers who seek out brands
Source: Urbis Scheme Assessment December 2014.1. Trade area for Roselands refers to Total Trade Area.
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Our customersRe establish relevance by positioning Roselands as an exciting ‘Fusion of Fashion, Food and Friendship’
Roselands
Source: Inivio Landscape Segmentation Data, March 2015.
Project vision – ‘Fusion of Fashion, Food and Friendship’The epicentre of Sydney’s eclectic south western suburbs
Project pillarsGo beyond the basicsOwn a place in peoples’ minds (famous for food)Entice people with discovery and belongingRetail as social spaceA future that reflects and respects the past
Look and feelSimple qualityConvivial, welcoming, energetic and funEclectic and richly textured
Very diverse customer baseNew Asian and Middle Eastern communitiesOlder communitiesYoung singles, couples and families buying homesAffluent households in the secondary and tertiary southtrade areas
Redevelopment targets core market of young familiesand key sectors in south western Sydney
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Floor plan – lower groundCreating a market leading fresh food precinct
Roselands
Existing
Note: Proposed plans are indicative only and subject to change.
Proposed
Supermarket
Supermarket
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Post development precinct plan – lower groundCreating a market leading fresh food precinct
Roselands
Supermarket
Supermarket
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Departmentstore
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Floor plan – groundNew fashion and youth precincts
Roselands
Existing Proposed
Note: Proposed plans are indicative only and subject to change.
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Post development precinct plan – groundNew fashion and youth precincts
Roselands
Note: Plans are indicative only and subject to change.
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Departmentstore
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Floor plan – level 1New food court, entertainment and leisure precinct
Roselands
ProposedExisting
Note: Proposed plans are indicative only and subject to change.
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Post development precinct plan – level 1New food court, entertainment and leisure precinct
Roselands
Note: Plans are indicative only and subject to change.
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Floor plan – level 2New cinema offer to complement dining precinct
Roselands
ProposedExisting
Cinema
Note: Proposed plans are indicative only and subject to change.
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Departmentstore
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Modern and open mall spaceArtist’s impression
Roselands
Ground floor
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Departmentstore
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Stylish retail designsArtist’s impression
Roselands
Ground floor
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Departmentstore
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Large entertainment complexArtist’s impression
Roselands
Level 1
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Departmentstore
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Vibrant new dining precinctArtist’s impression
Roselands
Level 1
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Contact details and disclaimer
For further information please contact:
Penny BergerHead of Investor RelationsT +61 2 8229 7760E [email protected]
Troy DahmsSenior Investor Relations ManagerT +61 2 8229 7763E [email protected]
Disclaimer
This document is a presentation of general background information about the activities of Vicinity Centres (ASX:VCX) current at the date of lodgement of the presentation (8 June 2016). It is information in asummary form and does not purport to be complete. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financialsituation or needs of any particular investor. These should be considered, with or without professional advice, when deciding if an investment objective is appropriate.
This presentation contains certain forecast financial information along with forward looking statements in relation to the financial performance and strategy of Vicinity Centres. The words ‘anticipate’,‘believe’, ‘expect’, ‘project’, ‘forecast’, ‘estimate’, ‘outlook’, ‘upside’, ‘likely’, ‘intend’, ‘should’, ‘could’, ‘may’, ‘target’, ‘plan’ and other similar expressions are intended to identify forward looking statements.Indications of, and guidance on, future earnings, financial position, performance and distributions are also forward looking statements. The forward looking statements included in this presentation arebased on information available to Vicinity Centres as at the date of this presentation. Such forward looking statements are not representations, assurances, predictions or guarantees of future results,performance or achievements expressed or implied by the forward looking statements and involve known and unknown risks, uncertainties, assumptions and other factors, many of which are beyond thecontrol of Vicinity Centres. The actual results of Vicinity Centres may differ materially from the anticipated results, performance or achievements expressed, projected or implied by these forward lookingstatements and you should not place undue reliance on such forward looking statements.
Except as required by law or regulation (including the ASX Listing Rules), Vicinity Centres disclaims any obligation to update these forward looking statements.
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